By: Yury Kalish and Ryan McCrum – In a recent opinion, the Court of International Trade granted a request for preliminary injunction to One World Technologies (“One World”). One World Techs., Inc. v. United States, No. 18-00200, 2018 WL 7049792 (Ct. Int’l Trade Dec. 14, 2018). One World’s request challenged a decision by U.S. Customs and Border Protection (“Customs”) excluding an entry of One World’s redesigned Garage Door Opener. The Customs decision was an enforcement of a Limited Exclusion Order issued by the ITC in Investigation No. 337-TA-1016, where One World’s original Garage Door Opener was found to infringe U.S. Patent No. 7,161,319 (“the ‘319 patent”).
In response to the Limited Exclusion Order from the ITC, One World redesigned its garage door openers by replacing a wire that was connecting the wall console and a head unit with a wireless connection. One World then submitted a letter to Customs seeking a ruling allowing importation of the redesigned Garage Door Openers, and attempted to import the redesigned models. However, Customs’ Intellectual Property Rights Branch (“IPRB”) determined that the redesigned models were included in the ITC’s final determination and subject to the Limited Exclusion Order. Customs concluded the redesigned models still infringe because they have wires connecting a wireless receiver on the head unit to the head unit itself, and that these wires satisfy the “digital data bus” element of the claims. Customs excluded the entry of the redesigned products at the Port of Charleston, and denied One World’s protest of the exclusion. One World appealed Customs’ ruling and denial of protest to the Court of International Trade (“CIT”), and filed a motion for preliminary injunction.
The CIT “consider[ed] four factors when evaluating whether to grant a temporary restraining order or preliminary injunction: (1) whether the party will incur irreparable harm in the absence of such injunction; (2) whether the party is likely to succeed on the merits of the action; (3) whether the balance of hardships favors the imposition of the injunction; and (4) whether the injunction is in the public interest.” One World, 2018 WL 7049792, at *6 (citing Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)).
The CIT first found that One World, who has only one exclusive distributor in the United States (Home Depot) will “suffer a permanent loss of business,” and “will lose its market share and innovative advantage” without injunctive relief, and therefore would incur irreparable harm. In the analysis of the likelihood of the success on the merits, the CIT first declined to give any deference to Customs because their decisions did not show ”thoroughness, logic and expertness.” The court then turned to claim construction, starting with a review of the record from the underlying ITC Investigation and from the U.S. Patent Trial and Appeal Board (“PTAB”), which published a Final Written Decision in response to One World’s petition for inter partes review of the ’319 Patent. The court explained that the claims require “that the motor drive unit’s controller be connected to the wall console’s controller by means of a ‘digital data bus,’ or ‘conductors or group of conductors which conveys digital data.’” The court found that “conductor” refers to a metallic wire or set of wires. The court concluded that “[b]ased on the definition of ‘conductor’ to a person of ordinary skill in the art, [claims require] that the motor drive unit’s controller be connected to the wall console’s controller by a physical wire or set of wires.” The court disagreed with Customs’ construction that the claims “encompass a device that combines wired and wireless communication links.”
The court then remarked that the balance of hardships factor was neutral because One World’s allegations of irreparable harm balanced the Government’s interest in the administration and enforcement of the ITC’s Limited Exclusion Order. The public interest factor was also balanced by protecting intellectual property rights without enforcing a patent beyond its metes and bounds.
In view of this analysis of the four factors, the court concluded that One World “has made the requisite showing for a preliminary injunction.” The court determined that One World’s redesigned Garage Door Openers do not infringe the ’319 Patent because the ’319 Patent is limited to wired connections only. The court found that the Customs’ determination that the ’319 Patent encompasses a part-wired and part-wireless connection was incorrect, and Customs improperly excluded One World’s redesigned Garage Door Openers from entry into the United States. On the same day, the CIT ordered Customs to take action in accordance with its opinion, “including the release of the subject merchandise for entry into the United States.” One World Techs., Inc. v. United States, No. 18-00200, Order, Dkt. #72 (Ct. Int’l Trade Dec. 14, 2018). One World was ordered to post bond equal to the entered value of shipment. Id. According to the CIT Scheduling Order, requests for trial must be filed by mid-summer.
By granting One World’s request for a preliminary injunction, the CIT may have saved One World’s business in the United States and their relationship with Home Depot, their exclusive U.S. distributor. This case highlights the role of the CIT in interpreting and enforcing ITC exclusions orders. At the same time, it highlights the importance of bringing all available design modifications to the attention of the ITC during the pendency of the investigation. The ITC issued its exclusion order almost nine months before the CIT’s decision to grant the preliminary injunction. The ITC’s review of the new design and finding of non-infringement as to the redesigned products in the original investigation could have resulted in a Limited Exclusion Order that clearly carved out non-infringing models – avoiding the need to involve Customs and the CIT altogether.